Why You Should Be Wary of Investing ‘Gurus’

GEORGE PAPADOPOULOS: People should never blindly follow investment “gurus.” At some point, sooner rather than later, their hot streaks will end and their followers will be left holding the bag. The investment mutual-fund world is littered with funds managed by “gurus” who had short-term win streaks, got rewarded by attracting many new investors, and then allowed their streaks to crash, losing their followers lots of money in the process. There are no gurus out there. Do not be mistaken that you can invest like Warren Buffett by buying whole companies.

If I had to pick one investment role model it would be John C. Bogle. He taught me that you are better off not trying to beat the market and that low costs matter. Index funds cost about five times less than actively managed funds and their returns get better the longer you hold them. I would highly recommend his latest book, “The Clash of the Cultures: Investment vs. Speculation.”

George Papadopoulos is a fee-only wealth manager in Novi, Mich., serving affluent individuals and families. You can follow him at twitter (@feeonlyplanner), connect with him at Google+ or visit his firm’s website.